Finance Chapter 4
True
A state may impose a personal property tax.
reducing the taxpayer's taxable income.
An exemption affects a person's tax situation by:
True
An office audit requires that a taxpayer visit an IRS office to clarify some aspect of his or her tax return.
Field audit
Elaine's Embroidery Emporium which is run out of Elaine's home is visited by an IRS agent who wants to verify the office expenses Elaine claims are valid. What type of IRS audit is this?
Schedule A.
Itemized deductions are recorded on:
tax shelter.
Tax-deferred retirement plans are a type of:
income tax.
Taxable income is used to compute a person's:
False
Taxes are only considered as financial planning activities in April.
generate revenue for funding government programs.
The main purpose of taxes is to:
False
The principal purpose of taxes is to control economic conditions.
Personal property tax
Tim Bridges owns a bass fishing boat. His state imposes an annual 3.25 percent tax on the current value of this boat. What type of tax is this most likely to be?
529 plan.
Two types of education savings plans are the Coverdell Education Savings Account and the:
Estate
What type of tax is imposed on the value of an individual's property at the time of his or her death?
Form 1040A
Which form would an individual use who has less than $100,000 in taxable income from wages, salaries, tips, unemployment compensation, interest, or dividends, and who is married and does not itemize deductions?
401(k) Plan
Which one of the following is a retirement plan sponsored by an employer?
Exclusion
Which one of the following is not included in gross income?
A person earning less than $9,000
Which one of the following people is least likely to have to file a federal income tax return?
Excise
Which type of tax is imposed on specific goods and services at the time of purchase?
False
Money received in the form of dividends or interest is commonly called "earned income."
having amounts withheld from income.
Most people pay federal income tax by:
